Reliance Communications Ltd is reportedly in talks with China Mobile Ltd for an alliance, with possible 5-6 per cent equity participation, the Business Standard said on Monday in an unattributed report.

It did not immediately clear whether China Mobile would take a holding in Reliance, or both the firms would buy stakes in each other. The talks are at a preliminary stage, the newspaper said.

Reliance Communications, India's second-largest mobile operator, needed cash to bid for upcoming 3G wireless spectrum auction, the paper said. The auction is expected to happen by the end of the year.

While Reliance Com declined to comment, China Mobile Ltd spokeswoman Rainie Lei said on Monday she isn't aware of talks between the Chinese company and Reliance on forming a strategic partnership, adding that "currently, China Mobile doesn't have any plan to invest in the Indian telecom market."

The Chinese telecom company, which is listed on the New York Stock Exchange, has operations in Pakistan, where it acquired Paktel for $460 million in 2007 and renamed the company CMPak.

It also operates mobile services in Hong Kong and recently bought a stake in Far East Tone Communications which operates mobile services in Taiwan.